The United Kingdom Independence Party (UKIP) launched their manifesto on Wednesday April 15th. Key tax proposals include an increase in the personal allowance to £13,500; to scrap inheritance tax; to introduce a new 30p tax band for those earning between £45,300 and £55,000 and a 40% rate thereafter and a cut in business rates for small businesses.
These are the party’s pledges by area of tax:
Income tax / national insurance
UKIP will raise the personal allowance to at least £13,000 so people can earn enough money to cover their basic living costs before the state starts to take income tax out of their pay packets; this will take those on minimum wage out of tax altogether.
The party will abolish inheritance tax; assets bought out of taxed income should not be taxed again when their owners die.
UKIP will raise the threshold for paying 40 per cent income tax to £55,000 and introduce a new intermediate tax rate of 30 per cent on incomes ranging between £43,500 and £55,000.
In the longer term, the party is committed to restoring the personal allowance to those earning over £100,000 and make 40 per cent the top rate of tax for all, as it used to be.
The longer term aspiration of a UKIP government will be to create an income tax structure of a basic rate of 20 per cent, an intermediate rate of 30 per cent, and a top rate of 40 per cent, meaning income taxes will be flatter and lower
The party seeks to obtain full control over VAT through secession from the European Union.
The party has stated that it will be able to deal with distortion imposed by EU legislation and zero-rate certain goods and services that have previously had VAT charged on them. They will remove VAT completely from repairs to listed buildings and sanitary products.
Pensions and tax
The party will introduce a flexible state pension window enabling those eligible to take a slightly lower state pension at age 65 even as the state pension age increases.
UKIP will double the budget for free pensions advice to help pensioners make sound financial decisions.
The party will also make it a criminal offence to cold call someone in respect of pension arrangements.
UKIP would implement a policy of charging those whose homes are empty for more than two years 50 per cent more than the applicable rate of council tax, with exceptions for owners who are in HM Armed Forces.
UKIP is opposed to the introduction of any form of ‘Mansion tax’.
The party would abolish the ‘bedroom tax’.
Families, tax credits & low earners
UKIP will increase transferable tax allowance for married couples and civil partners to £1,500.
The party has also stated that it will honour the current Government’s commitment to providing a new tax-free childcare scheme, worth up to £2,000 for children under twelve.
The party has stated that if a business has only one property and the rateable value is less than £50,000, the business will get 20 per cent rate relief. If the business has more than one property, the 20 per cent rate relief will still apply, provided the total rateable value of all properties is less than £50,000.
Other existing business rate reliefs will not be affected and will apply where the relief provided under those schemes is greater than 20 per cent. Almost 90 per cent of business properties, over 1.5 million in total, have a rateable value of less than £50,000, so are potentially eligible for this 20 per cent discount.
UKIP will introduce a scheme whereby small businesses will provide evidence of repeated late payments, beyond agreed terms, together with evidence that timely requests for payments have been made, to HM Revenue and Customs. Based on the evidence - particularly if there are multiple complaints about the same company -HMRC can then carry out an inspection of that company’s records. If the large company is found to be systematically exceeding its contractual terms of payment with small businesses, a sanction of significant fines, proportionate to the extent of the abuse of terms, will be levied.
UKIP will also seek to end a growing practice whereby large companies extend their payment terms to small companies, by arranging for their supplier to take out a bank loan to facilitate their demands.
To address both these issues, UKIP will pilot a scheme to improve access to trade credit insurance to small businesses. This insurance already exists in the market, but can prove restrictive for smaller companies, especially in certain business sectors.
Avoidance & Evasion
UKIP will not allow large companies to continue getting away with paying zero or negligible corporation tax in Britain. UKIP will seek to restore British tax sovereignty in order to end the practice of businesses paying tax in whichever EU or associated country they choose.
The party will also set up a Treasury Commission to monitor the effectiveness of the new Diverted Profits Tax and bring in any further measures necessary to prevent large multinational corporations using aggressive tax avoidance schemes.
Green taxes & Environment
UKIP will abolish green taxes and levies and withdraw from the EU’s Emissions Trading Scheme, reducing fuel bills and enhancing industrial competitiveness.
The party also intends to levy a Petroleum Revenue Tax (currently 50 per cent) on any shale profits and invest the income into a Sovereign Wealth Fund.
UKIP will discontinue the carbon floor tax on the basis that production for coal fired power stations is combined with carbon capture and storage.
Tax & Migrants
The party has stated that all new migrants to Britain will have to make tax and national insurance contributions for five consecutive years before they will become eligible to claim UK benefits, or access to more than non-urgent NHS services, save for any exceptions stipulated by the Migration Control Commission.
The introduction of a new system (to replace the Barnett Formula) will result in substantial reductions in funding for Scotland, but, as the Scottish government is to have significant further powers over taxation, borrowing and spending in due course, it can make its own decision as to whether to raise taxes or cut public spending to balance the books.
UKIP will remove road tolls where possible and let existing contracts on running road tolls expire. The party believes that motorists are already taxed highly enough through fuel and vehicle taxes.
The party will also ensure tax and planning policies support historic buildings and the countryside; offer tax breaks to smaller breweries to encourage micro-breweries and keep Council Tax as low as possible.
Finally, UKIP will revise the Armed Forces terms of service to ensure personnel on operational duty overseas do not pay income tax.
For further information see
UKIP Manifesto 2015
Analysis of other party manifestos will follow.
The CIOT is of course strictly neutral and nothing in these posts should be interpreted as endorsement for or opposition to any of the policies mentioned.
CIOT External Relations Officer
Friday 01 May 2015